Andrew Chen Archives

Turns out it’s harder than you think to build a vertical social network for Star Wars fans

Are you trying to build a vertical social product?
One of the most common questions I get on viral marketing is structured as the following:

I’m trying to build a social network targeted at X. How do I make successful with viral marketing?

Typically, the product in question will be some sort of subset of a general social network, such as:

• parents
• sales professionals
• fans of a TV show
• car lovers
• etc

and in fact, to generalize, a vertical social product might also include products like:

• a sci-fi themed MMORPG
• social products aimed at the Twitter audience
• products for a certain demographic
• people with webcams
• etc

Catch my drift? Well, let’s get even more specific about what it means to be vertical versus horizontal.

Horizontal versus vertical products
Basically, the definition how vertical or horizontal something is depends on what % of people are likely to use it in some form. The most horizontal products become core features of the internet, such as:

• browsers
• search
• email
• mobile
• video
• etc.

For this reason, products centered around communication or content are often considered very horizontal because a lot of people are likely to use them. These end up being the most viral products, for a number of reasons we’ll discuss later.

Compare this to more specific products or features, such as content on cars, or a sci-fi themed video game. These are things where if you were to select a random group of 100 internet users, you’d find many of them have no interest in using that site.

The place that becomes important is the “branching factor” of your viral invite strategy.

How vertical products drive down branching factor
In tree data structures, the branching factor is determined by the number of children that a node has. It can be represented as the variable “num_friends” in the following equation:

users * num_friends * conversion % = new users

If you think of a viral loop as generations upon generations of users inviting each other, it’s very important that each user has a big branching factor, thus inviting enough of their friends to propagate the viral process. (With the usual caveat that you must balance your viral incentives against your user retention goals!)

The problem with vertical products is that it automatically impedes the # of invitees that a typical inviter might reach out to. The % of those invitees that get excited about the product upon their first use of it might be quite low, and if they leave prematurely without inviting their group of friends, then your viral process may peter out. It adds an extra term here, % targeted, which can significantly drive down this process:

users * % targeted * num_friends * conversion % = new users

So as a result, the more vertical a product is, and the lower the % of invitees that may be interested, the harder it will become viral. And in a world of shrinking possibilities on Facebook/Open Social, overcoming a big quantitative hurdle.

But don’t worry, it might still be OK!
I’ll close out this blog with two thoughts on this subject, first on scenarios where vertical products can still work, and also situations where you don’t care about being completely viral.

Vertical products can still work because of the fact that some target audiences are very concentrated amongst each other. The business world is often like this, or teenage girls, also! If you build a product targeted at them, the networks are dense enough and interconnected enough that you’ll get some degree of virality that eventually peters out as you hit this network’s edges, but it works in the meantime. I think that Linkedin is a great example of a site that provides great value, and because peoples’ Outlook contact lists are populated with large target-rich lists of like-minded professionals, this can work quite well.

As a related note, products like Ning, mailing lists, Yahoo Groups, etc. also do an interesting variation of this where maybe you came in via a “for Moms” invitation but then you end up making your own “for pet fanatics” group. This basically converts vertical traffic into horizontal traffic, neat!

Similarly, it’s not required that a site become viral to succeed. Oftentimes, a more specific audience is able to generate key context which provides high advertising revenues and/or leadgen/CPA opportunities. Because of this, these sites can often buy significant amounts of traffic which are then amplified by some degree of viral marketing but is not completely driven by it. In this way, the viral marketing is just a “kicker” that drives down the cost per acquisition without pushing it down to zero.

Both cases can be successes – I’d encourage everyone to check out Dogster, Linkedin, IMVU, and Puzzle Pirates as three examples of vertical products that worked out their acquisition strategies.

If you liked this article, you can check out my related essays here.

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